Legislative Update

The House and Senate were scheduled for only perfunctory sessions this week, and our attention has been focused on bill filings. The deadline for introduction of substantive bills is February 26th in the House and February 15th in the Senate. To-date, substantive tax legislation is somewhat light, although a large number of “technical” or vehicle bills have been filed. These technical/vehicle bills make a non-substantive, typically one-word change to a tax act and are intended as a placeholder for substantive legislative amendments that may arise later in session.

House Bills of note that have been filed:

HB 74amends the Illinois False Claims Act to provide a new procedure for reporting false claims relating to taxes administered by the Illinois Department of Revenue. This is “agreed” language that was negotiated by the Illinois Chamber, TFI, the Illinois Retail Merchants Association, the Department of Revenue and the Illinois Attorney General’s Office last fall. The Illinois Chamber strongly supports this legislation and is hopeful that its enactment will curtail the abuses Illinois retailers have experienced over the last several years with privately filed whistleblower lawsuits.

HB 75 provides that the Department of Commerce & Economic Opportunity shall establish a database that contains information about Illinois businesses. Participation is voluntary but fees are assessed for participating businesses. The legislation provides that the fees go to The Illinois Chamber of Commerce Support Fund. PLEASE NOTE: This is not an Illinois Chamber initiative and, in fact, we are opposed to the bill. We will be speaking to the bill’s sponsor to request that he table the bill.

HB 91 would amend the Illinois Income Tax Act to repeal the temporary income tax increases on individuals and corporations. It also removes a limitation providing that no net loss carryover deduction may exceed $100,000 for any taxable year ending on or after December 31, 2012 and prior to December 31, 2014.

HB 122 Authorizes tax credits against Illinois income taxes and insurance company privilege taxes for 25% of the costs of rehabilitating eligible historic property. It allows the credits to be carried back and forward, or to be transferred, sold or assigned. The credit would be administered by DCEO and would take effect July 1, 2013.

HB 124 is an amendment to the Retailers’ Occupation Tax Act building materials exemption. It would allow taxpayers in River Edge Development Zones to claim the exemption for all real estate projects (now only industrial or commercial projects).

HB 155 amends the Retailers’ Occupation tax and related taxes to provide that with respect to cellular phone sales, the terms “selling price” and “gross receipts” do not include consideration paid by a third party cellular service provider.

HB 165 amends the various sales tax acts to provide that on or after July 1, 2013 and on or before December 31, 2018, the taxes apply to (i) 90% of the proceeds of sales of gasohol, (ii) 80% of the proceeds of sales of E20 blended ethanol fuel, and (iii) 60% of the proceeds of sales of E30 blended ethanol fuel. It also amends the Illinois Renewable Fuels Development Program Act to provide for certain renewable fuel grants.

House Joint Resolution Constitutional Amendment #2, proposes to amend the Revenue Article of the Illinois Constitution to authorize graduated income tax rates for individuals. It also provides that any income tax on corporations shall be at a non-graduated rate, not to exceed the average of the lowest and highest rates by more than a ratio of 8 to 5.